The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Labour’s Share of Income

  • Douglas Gollin
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2092

Abstract

Economists have long studied labour’s share of national income as a crude indicator of income distribution. More recently, labour’s share has also been seen as offering insights into the shape of the aggregate production function. This has made labour’s share a parameter of interest for macroeconomics, growth economics, and international economics, among other fields. Recent studies support the longstanding observation that labour’s share of national income is relatively constant over time and across countries. Measurement of labour income, however, can be difficult in economies where many people are self-employed or work in family enterprises.

Keywords

Aggregation Balanced growth Cobb–Douglas functions Constant-returns production function Entrepreneurial income Factor shares Labour’s share of income National income accounting 

JEL Classifications

D4 J10 
This is a preview of subscription content, log in to check access.

Bibliography

  1. Antràs, P. 2004. Is the US aggregate production function Cobb-Douglas? New estimates of the elasticity of substitution. Contributions to Macroeconomics 4(1), Article 4.Google Scholar
  2. Bentolila, S. and G. Saint-Paul. 2003. Explaining movements in the labor share. Contributions to Macroeconomics 3(1), Article 9.Google Scholar
  3. Bernanke, B.S., and R.S. Gürkaynak. 2002. Is growth exogenous? Taking Mankiw, Romer and Weil seriously. In NBER macroeconomics annual 2001, ed. B.S. Bernanke and K.S. Rogoff. Cambridge, MA: MIT Press.Google Scholar
  4. Cobb, C.W., and P.H. Douglas. 1928. A theory of production. American Economic Review 18: 139–165.Google Scholar
  5. Duffy, J., and C. Papageorgiou. 2000. A cross-country empirical investigation of the aggregate production function specification. Journal of Economic Growth 5: 87–120.CrossRefGoogle Scholar
  6. García-Verdú, R. 2005. Factor shares from household survey data. Working paper no. 2005–05, Dirección General de Investigación Económica, Banco de México.Google Scholar
  7. Gollin, D. 2002. Getting income shares right. Journal of Political Economy 110: 458–474.CrossRefGoogle Scholar
  8. Houthakker, H.S. 1955. The Pareto distribution and the Cobb–Douglas production function in activity analysis. Review of Economic Studies 23: 27–31.CrossRefGoogle Scholar
  9. Johnson, D.G. 1954. The functional distribution of income in the United States, 1850–1952. Review of Economics and Statistics 36: 175–182.CrossRefGoogle Scholar
  10. Jones, C.I. 2005. The shape of production functions and the direction of technical change. Quarterly Journal of Economics 120: 517–549.Google Scholar
  11. Kaldor, N. 1961. Capital accumulation and economic growth. In The theory of capital, ed. F. Lutz. London: Macmillan.Google Scholar
  12. Keynes, J.M. 1939. Relative movements of real wages and output. Economic Journal 49(193): 34–51.CrossRefGoogle Scholar
  13. Kravis, I.B. 1962. The structure of income: some quantitative essays. Philadelphia: University of Pennsylvania Press.Google Scholar
  14. Kuznets, S. 1946. National income. In Encyclopedia of the social sciences, vol. 11. New York: Macmillan. Reproduced In Readings in the theory of income distribution, selected by a committee of the American Economic Association. Philadelphia: Blakiston.Google Scholar
  15. Kuznets, S. 1959. Quantitative aspects of the economic growth of nations IV: distribution of national income by factor shares. Economic Development and Cultural Change 7(3,Part II): 1–100.Google Scholar
  16. Ortega, D. and F. Rodríguez. 2006. Are capital shares higher in poor countries? Evidence from industrial surveys. Wesleyan economics working papers no. 2006-023, Wesleyan University.Google Scholar
  17. Smith, A. 1776. The wealth of nations: Books I–III, 1986. Harmondsworth: Penguin Books.Google Scholar
  18. Solow, R.M. 1957. Technical change and the aggregate production function. Review of Economics and Statistics 39: 312–320.CrossRefGoogle Scholar
  19. Solow, R.M. 1958. A skeptical note on the constancy of relative shares. American Economic Review 48: 618–631.Google Scholar
  20. Streightoff, F.H. 1912. The distribution of incomes in the United States, 1912. New York: Columbia University Press.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Douglas Gollin
    • 1
  1. 1.